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Is It The Right Time to Refinance Your Michigan Mortgage Loan?

The answer to that question really depends on your unique personal circumstances. That’s why while Guild Mortgage Inlanta offers many options to help Michigan homeowners lower their mortgage rates or free up cash for renovations, college tuition or other important life events, we always recommend talking to one of our S.M.A.R.T. mortgage specialists before you apply.

When you refinance your home, you are paying off an existing loan with proceeds from a new loan. Generally, when you refinance you are taking advantage of improvements in your credit, built-up equity, changes to terms, or drops in market interest rates. Benefits of refinancing can include lowering your current payment, changing the term of your loan to raise or lower your amortization length, or borrowing against the equity in your home to get cash out.

With today’s historically low interest rates, many people find it beneficial to refinance to take advantage of great rates or to shorten the amortization period of their mortgages to reduce lifetime interest paid. Those not looking to cash out some of their equity will find our Streamline refinance options fast and easy.

For homeowners looking for home improvement cash, there are unique types of home loans designed specifically for renovation. There are also several types of general cash-out options. When rates are low, it can make sense to do a home refinance instead of a homeowner line of credit because you are also lowering your rate or amortization length (if desired). A new mortgage is often the most cost-effective approach to financing major projects that carry a long depreciation life and improve your home, such as swimming pool construction, a lifetime roof, or a long-term energy efficiency project like implementing geothermal heating.

The Inlanta Michigan Teams will help you select the best option for your purpose. The following is an overview of options available for refinancing your mortgage loan. Talk to us about your goals to find the best fit. Determining the right refinance option for you will in part be determined by the type of home loan you currently have, your LTV (loan-to-value) ratio in the case of cash-out refinancing, and the current value of your home according to an appraisal.

Regular Refinance Options

• Conventional Refinance
• Jumbo Refinance
• FHA Refinance
• VA Refinance
• USDA Refinance

Streamline Refinance Options

No-appraisal streamline refinances are used solely for the purpose of lowering the monthly mortgage payment. In other words, you don’t have the option of cashing out equity under the no-appraisal program.

• FHA Streamline Refinance – In order to refinance using the FHA Streamline Refinance program, your mortgage must already be FHA insured. The mortgage to be refinanced should be current (not delinquent). The refinance is to result in a lowering of the borrower’s monthly principal and interest payments. No cash may be taken out on mortgages refinanced using the streamline refinance process. Contact a mortgage loan professional at Inlanta Michigan to discuss FHA Streamline Refinance opportunities.
• VA Streamline Refinance  – otherwise known as an IRRRL. This program lowers your interest rate by refinancing your existing VA home loan. No appraisal or underwriting package is required when applying for an IRRRL. An IRRRL may be done with “no money out of pocket” by including all costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs.

Cash Out Refinance Options

Access the equity in your home and get cash that you can use to meet all kinds of financial goals. The existing mortgage and any liens on the property are paid off and replaced with a refinanced mortgage.

• Conventional Cash-Out Refinance
• FHA Cash-Out Refinance
• VA Cash-Out Refinance

FHA 203K Rehabilitation Loans

FHA 203K Rehabilitation loans are an important tool for community and neighborhood revitalization. The 203K program offers borrowers the resources to rehabilitate a home that may be in need of repair. Borrowers have the option of refinancing with a 203K loan in order to make improvements on their existing residence or to purchase a new home in need of repairs.

HomeStyle® Renovation Loans

The HomeStyle^® Renovation Loan program allows a borrower to renovate, repair, or improve a home or investment property. HomeStyle^® combines a home purchase or refinance with home improvement financing in one loan with one closing. HomeStyle^® renovation loans let you customize a home to your liking or make needed repairs.

 VA 100% Cashout Refinance VA’s

VA’s Cash-Out Refinance Loan is for homeowners who want to take cash out of your home equity to take care of concerns like paying off debt, funding school, or making home improvements. The Cash-Out Refinance Loan can also be used to refinance a non-VA loan into a VA loan. VA will guaranty loans up to 100% of the value of your home.

It’s true that mortgage rates are at a historic low right now – so low that you might be inundated with junk mail, spam and calls from churn-and-burn mortgage companies. In fact, today’s rates are not so far from the all-time low for the benchmark 30-year rate. which was 3.5 percent in December of 2012. With rates slipping over the past few months, affordability for purchasing is increasing.

For example, a 1 percentage point difference (4.5 to 3.5) on a $250,000 mortgage can mean $144 less per month in mortgage interest.

While this is great news, sound financial planning avoids knee-jerk reactions to rate fluctuations. Instead, it’s better to take the long view, and do a thorough analysis of the best way to leverage current conditions.

The bottom line is that great rates alone should never drive a new mortgage or refinance application. The benefits are case-by-case, depending on your unique circumstances. That’s where guided, mathematical analysis comes in.

Three Scenarios in the Great Rate Debate

• Increased affordability is great news for first-time homebuyers who are ready to say goodbye to renting and for those ready to move up to their dream homes.
• Saving up for a conventional downpayment may not make sense given the rate of housing increases, which would offset the advantage of the lower rate.
• Existing homeowners who are tempted to refinance need to first determine their break-even point, the length of time they plan to stay in the home, and all their other financial variables.

Case 1: Ready to Move

If you’re ready to pull the trigger, consider yourself lucky that you’re doing so at a great time to enter a mortgage, rate-wise. Over the long term, you’ll save tens-of-thousands of dollars by locking in at a great low rate. Our S.M.A.R.T. mortgage specialists will guide you through the best mortgage structure to realize your goals for financial security and find the product that best fits your circumstances.

Case 2: Thinking About New Purchase

If you’re just now thinking about purchasing a new home and are motivated by the low rates, here are a few of the considerations our S.M.A.R.T. mortgage specialists will guide you through:
– First-time homeowners should evaluate whether waiting to save up a bigger downpayment makes sense or not. For example, paying PMI (mortgage insurance) might be cheaper than waiting when home values are appreciating at 5% or more each year. The extra affordability of the low rates can be eroded quickly by increasing home values.
– Purchasers who already own a home should evaluate the best use of their sale proceeds. While it’s traditional to use proceeds as the downpayment on a new home, the proceeds might work harder elsewhere when mortgage rates are so low, handily off-setting the cost of PMI. For example, using proceeds to pay down revolving debt could make more sense and keep more money in your pocket at the end of the day.

Case 3: Leveraging Home Equity

For those who have a considerable amount of home equity, the first step in considering a refinance is to determine your break-even point. Once you know how long it will take to “pay back” the refi cost, then you can balance that against your imminent life circumstances. For example, if you might relocate for work in a year and your “break even” point is 16 months, then it wouldn’t necessarily make sense. Another consideration is your financial goals. For example, if you’d like to generate recurring revenue through an investment property, low rates make it an attractive time to do so.

Whatever your scenario, talk to a S.M.A.R.T. mortgage specialist to analyze your circumstances and map the best course for your financial security.

Are you a renter who hopes to one day own your dream home? Are you looking to move up from your starter home? Did something catch your eye driving by?

If you think you’ll even LOOK at a house for sale in West Michigan this year – or next — it’s time to take a closer look at your “real” credit score. That’s because you need to ensure your financial ducks are in a row BEFORE you can house-hunt with a mortgage pre-approval in hand.

In the tight real estate market Grand Rapids and West Michigan are currently experiencing, where multiple offers above asking price have become the norm, you cannot afford to be house hunting without a bona fide pre-approval in hand. Not a pre-qualification, a pre-approval. What’s the difference? Well, at Inlanta, a pre-approval means taking a deep look at your eligibility, your unique considerations, and going through initial underwriting to secure assurance that your loan will close and that you know exactly what to expect in terms of payments and closing costs.

By going through our Pre-Approval process, clients are then able to have us generate property and price-specific approval letters on demand. Not only does that make the offer stronger, but it is also a smarter way to negotiate. An open qualification letter that spells out your maximum leaves too much room for sign-backs, and at the same time, isn’t as confidence-inspiring as a bona fide pre-approval.

If you hope to be in the buying market this season or next, talk to one of the S.M.A.R.T. Mortgage Specialists at Guild Mortgage Inlanta Michigan to get ready to win your bid on your dream home. It all starts with understanding your credit and your program eligibility. Contact us to get started.

There are lots of places on the internet to learn your credit score. But if you’re planning to purchase a new home, these online scores don’t tell the whole story. A consumer score is meant to be educational. All information is the same that will be found on a mortgage report, but the weight given in scoring is completely different. The idea is that the consumer can see how they compare to national averages and can catch errors. Mortgage scores are based on FICO Scores, which have many different versions and the newest model is rarely used right away in the industry.

Generally speaking, myfico.com is the only source to get your true “mortgage” scores. Of the FICO scores, there are different types of scores used by auto lenders, credit card companies, and mortgage companies.

• FICO Credit can range from no credit to scores between 300 and 850
• 750+ is considered excellent credit
• There are 3 Bureaus who report credit that all banks use to determine credit worthiness. They are: Experian, Equifax, and Transunion.
• However, the types of free online scores most consumers see are actually different than what a lender uses.

Need help getting ready to apply for a pre-approval or mortgage? Contact one of our S.M.A.R.T. Mortgage Specialists today.